"All other expectations" have been withdrawn - that presumably includes full-year guidance for mid-single digit revenue growth. Guidance will be updated during Intel's April 14 Q1 report.

The chip giant blames the warning on "weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain." In particular, it thinks "lower than expected Windows XP* refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe," are taking a toll on sales. Server CPU division sales are "meeting expectations."

Update (11:35AM ET): While Intel is still down over 4%, Micron and Seagate have turned positive, and HP is close to breakeven. Microsoft, Nvidia, and Western Digital have pared their losses, but remain lower.

Immersion has more than given back the Monday gains it saw after Apple, which relies on a proprietary haptic solution that some think infringes on Immersion's IP, unveiled a 12" retina MacBook with a pressure-sensitive trackpad. Solar stocks are reversing course after rallying in recent weeks with the help of good earnings news and YieldCo hopes.

BofA/Merrill's Wamsi Mohan has reinstated coverage on Seagate (STX-5.4%) with an Underperform rating and $50 target, and on Western Digital (WDC-3.3%) with a Neutral rating and $117 target.

Mohan is worried Q1 and Q2 hard drive demand (i.e. TAM) is tracking below expectations. With regards to Seagate, he's also worried about its relatively high PC exposure (especially for business PCs), SSD cannibalization risk in both the client and (high-margin) performance hard drive segments, and potential conflicts with OEM customers from Seagate's systems business (stems from the Xyratex acquisition).

Though worried about Western's exposure to the same TAM issues as Seagate, Mohan is relatively positive on the company due to its "solid" SSD position (partly the result of acquisitions) and strength in the growing high-capacity enterprise drive segment (boosted by demand from Internet giants).

Top hard drive/SSD controller supplier Marvell (MRVL-2.1%) is following Seagate/Western lower, as is hard drive assembly supplier Hutchison (HTCH-1.7%). The Nasdaq is down 0.9%.

Marvell's decline comes as the company reveals a Release 10 4G modem at the Mobile World Congress (competes with chips from Qualcomm, Intel, and others), as well as a partnership with Google to support the Web giant's Ara modular phone project.

Micron (MU-3.6%), Nvidia (NVDA-3.4%), Seagate (STX-3.7%), and Western Digital (WDC-3.4%) have joined Intel and HP among the ranks of PC-exposed names off sharply in response to Microsoft's results and guidance. The Nasdaq is down 1.5%.

The 13% Y/Y drops reported by Microsoft for Windows OEM Pro and non-Pro license revenue are getting a lot of attention, as is the fact Microsoft partly blamed the former on slowing business PC demand (also reported by IDC).

Seagate estimates the addressable market (TAM) for hard drives was 144M-145M in FQ2, down from 147M in FQ1 and up from 142M a year earlier. The company pegs its share at 40%. Hard drive ASP fell by $1 Y/Y to $61.

Seagate's enterprise drive sales rose 200K Y/Y in FQ3 to 7.7M. They've been pressured by weak enterprise server/storage demand, but have also received a lift from strong demand from Web/cloud clients. The latter customer base often prefers higher-density/lower-margin enterprise drives.

Western Digital (WDC+2.6%) is once more heading in the same direction as Seagate, as is assembly supplier Hutchison (HTCH+2.9%).

Nomura has upped SanDisk to Neutral and hiked its 2014/2015 estimates. The firm is still worried about the NAND pricing/margin gap that exists between SanDisk and rivals, it thinks "the risks of an earnings miss in 2H14 have declined" amid seasonal improvements and slowing industry supply growth.

In its investor day slides (.pdf), SanDisk forecasts annual NAND flash industry bit growth will be in a modest 30%-40% range going forward. The company also noted its client SSD sales tripled in 2013 to $922M - SanDisk claims to be the market's #2 vendor. Enterprise sales almost doubled in 2013 to $267M; SanDisk is aiming for over $1B in 2016 enterprise sales.

Of interest to Seagate (STX+1%) and Western Digital (WDC+1.7%) investors: SanDisk predicts the SSD attach rate for business notebooks will grow to 39% in 2017 from 16% in 2013, and that the rate for consumer notebooks will grow to 21% from 10%. The hard drive industry is already expected to see limited growth due to SSD pressure.

Both SanDisk and NAND rival Micron (MU+3.3%) have made fresh 52-week highs. Micron rallied last week following a report the company is set to hike DRAM prices.

Like Seagate (STX-4%), Western Digital (WDC-6.1%) missed FQ3 revenue estimates while beating EPS forecasts. Also like Seagate, it offered light FQ4 guidance on its CC (transcript): Revenue of $3.5B-$3.6B and EPS of $1.65-$1.75 vs. a consensus of $3.72B and $1.89.

While Seagate estimates March quarter industry hard drive shipments totaled 138M, Western pegs them at 137M. More importantly, the company expects shipments to fall to 130M in the June quarter.

Goldman notes hyperscale data center owners (Google, Facebook, Amazon, etc.) are getting more efficient with their storage usage, and that this is affecting both Western and Seagate. Seagate is also dealing with inventory issues at enterprise storage OEMs; Western isn't reporting anything similar.

With SSDs continuing to encroach on hard drives, Western's enterprise SSD sales grew to $134M (+46% Y/Y, still less than 4% of sales) in FQ3, and are expected to outgrow the broader market going forward. Non-PC applications made up 53% of total revenue.

Seagate had a 28% GM in its December quarter (flat Q/Q and +100 bps Y/Y), and guided for margins to be roughly flat Q/Q in the March quarter. Western had a 30.1% GM (+30 bps Q/Q and +140 bps Y/Y), and guided for March quarter GM to be near the midpoint of a 27%-32% target range.

Both companies have seen a margin boost from hard drive industry consolidation. Seagate reports on April 29, and Western on April 30.